TSMC is already considering alternatives to a possible war between China and Taiwan (and they go through Japan)

The semiconductor industry giant TSM looks with interest beyond the borders of Taiwan, to the nearby and in many ways attractive Japan. In a complex scenario, marked by the growing tension between Taipei and Beijing, the Taiwanese multinational values ​​reinforcing its commitment to its Japanese neighbor. The objective: to seek calmer lands that allow it to minimize the risks of a geopolitical scenario that —warns USA— is becoming more complex after the escalation in the conflict between the Chinese authorities and those in Taiwan, where TSMC is based.

Interest in the upstairs neighbor. That, in short, is what I would be showing Taiwan Semiconductor Manufacturing (TSMC): interest in its neighbor to the north, Japan. So sign it at least The Wall Street Journal, which ensures that the company is considering expanding its production capacity in the country of the rising sun. At the moment there would be no decision made, but the economic newspaper assures that TSMC assesses how feasible the bet would be.

It is not the first step. Nope, TSMC has targeted Japan before. In November 2021, together with Sony, it announced its plans to build a chip plant in Kumamoto, on the island of Kyushu, in southern Japan, with an investment of 7,000 million dollars. The project was presented as an attempt to alleviate the tensions that the semiconductor supply chain was suffering on a global scale, although it is not planned that the factory will start operating until 2024. Once ready, the plant will theoretically focus on chips used in the automotive and sensor industry.

lure of a giant. That TSMC considers expanding its production capacity in Japan is also not a bad prospect for the country’s authorities. The Japanese government has recognized that he would like TSMC to strengthen itself in its territory beyond the plant that it is already building, a valuable opportunity that would allow the Asian state to strengthen its technology sector.

When they presented their project the TSMC and Sony recognized that the future Kyushu plant will benefit from “strong support from the Japanese government”. That backing-points out TWSJ— would have been key, in fact, for the company to overcome some misgivings, such as limitations in energy supply or the risk that the earthquakes that hit the region may represent. Proof of Tokyo’s interest in strengthening its semiconductor industry is that at the end of 2021 it approved an ambitious investment plan of 5,200 million dollars to strengthen its industry.

geopolitical tensions. To understand TSMC’s interest, it is essential to go beyond Tokyo’s aspirations and pay attention to the backdrop, a context marked by tensions between China and Taiwan, an autonomous island that Beijing claims as part of its territory. The revalidated Xi Jinping, president of China, has insisted on his desire for a “reunification” with the island and although he speaks of a “peaceful” life, the last few months have been marked by a dialectical and military escalation and the leader of the People’s Republic himself acknowledges that he does not renounce force.

tremendous tensions. just a few days Antony Blinken, US Secretary of State, spoke directly of “tremendous tensions” in the conflict. “Instead of adjusting to the status quo, he will seek the reunification of Taiwan in a much faster timeframe,” the senior official said this week. Last year the country’s Army calculated that China could invade the autonomous island in a matter of years, in 2027but in recent days there are those who point to a shorter-term scenario.

Not long ago, Mark Liu, senior manager of TSMC, already warned during an interview with the network of the tremendous impact that a resurgence of the conflict would have on his activity,

A strategic sector. Here is another key. TSMC has a key weight in a strategic sector, as the US itself has just shown, which recently decided to veto any export of chips, machinery and talent “made in the USA” to China with a clear purpose: to prevent the Asian giant from advancing towards technological self-sufficiency. His movement matches a powerful plan to strengthen their own national sector. In 2020 TSMC also announced its plans to invest 12,000 million dollars to build a chip factory in Arizona.

Images: TSMC